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Car Manufacturers Gone – Where to now?
04 March 2014
This week I met with a former Austrade representative, himself a new entrepreneur, who described the current state of play in Australia as “one of the major asset strips in Australian history”. Raids on Australia’s intellectual property, resources, technologies and real estate are occurring in unprecedented numbers. Why? Some would point a finger at government, but the main reason is lack of funds.
Whilst the engine of enterprise is in full throttle, the risk adverse nature of Australia’s investment community means that companies with unique IP and value propositions, with strong teams, are leaving Australia– in droves.
When visualising these entrepreneurs - the standard myth is that they are young, in their 20s; young guns naive to the ways of business. This is only a subset of the picture however. My experience is that many of these entrepreneurs are mature, with a deep industry knowledge, who have developed niche solutions to their industry’s challenges.
Take for example Aston Industries. Anyone with a property portfolio should know about this business. With lifetime asset maintenance costs coming in at about 3 times construction costs – property managers would benefit from the Aston solution – specialist data collection tools and software, allowing business to take control and plan for their assets into the future. Born out of the consulting space the Aston team have a deep industry knowledge and clients such councils, universities, government departments and major corporates.
Again, a solution created out of consulting to a major international publishing company, QuayPay offers a payment solution that keeps you embedded in the content you are reading, rather than taking you away to 3rd party sites such as Paypal. QuayPay provides payment experiences online and mobile. Their platform, which is built, puts the customer first and the merchant in control. Major retailers have sought them out and are currently evaluating their solution.
Both these companies have mature, industry-respected boards, are public unlisted, have significant contracts underway or are in negotiation with significant players.
Investing in early stage businesses is not without risk. It can form, however, the risk component of a broader portfolio, offering exposure to some of the more dynamic opportunities available with companies likely to be acquired by larger industry players. The potential upside is significant and the contribution and networks industry-relevant investors bring to the table, recognized and valued.
Kate Ingham works for Alchemy Equities, an organisation raising equity capital in Sydney and Australia. This piece does not constitute advice but is merely the opinion of the author.